Co-author Brooke SizerIt’s been said that your most important decisions are made when you write your contract, not when you have to sue on it. Kachina Pipeline Company v. Lillis agrees.
In a gas-purchase agreement, can the pipeline operator (Kachina) deduct costs of compression from its payments to the producer (Lillis).
“No”, said the
First, an apology. I have brought shame to my own self and this blog for failing to invoke trigger warnings about activities I will mention again, after the appropriate trigger warning. (I had no idea there were so many.)
Trigger Warning
This post will refer to activities in oil and gas production as they
We recently discussed failure to produce in paying quantities. Another decision involving the same lessee had a different result. Why?
The question in both cases was whether the well was capable of producing in paying quantities and whether a reasonably prudent operator would continue to operate the well.
In the new
What is your guiding principle when writing agreements?
“The more the words the less the meaning, and how does that profit anyone?” Ecclesiastes 6:11.
or
“The beginning of wisdom is the definition of terms.” Socrates
The Legal Issue
A lease grants “a perpetual, cost-free (except only its portion of production taxes) overriding royalty of five
Co-author Matthew WheatleyYour well consultant just cemented 10,000 feet of tubing inside the casing of your eight million dollar well, … a neighboring operator frac’ed his Eagle Ford well into your Austin Chalk completion, thereby trespassing and contaminating your well. Righteousness and vengeance are yours. The jury will draw and quarter the offender.
Not
Co-Author Matthew WheatleyIn Texas, lost profits can’t be recovered as damages unless proven to a “reasonable certainty”.
Question 1: What does that mean?
Question 2: Does it matter if the deal is in Bulgaria?
Let’s get rid of the second one first. Bulgaria or no Bulgaria, it doesn’t matter as long as Texas law
One consequence of falling oil prices is leases that cease to produce in paying quantities. The producer’s question: How soon must the well return to profitability? The answer in BP American Production Company v. Laddex, Ltd. is, a “reasonable” period, to be determined by the jury and not the judge.
The Magic Well
The
Co-author Brooke SizerAnother Louisiana court has ruled that the Subsequent Purchaser Rule applies to damages following a mineral lease. In Bundrick v. Anadarko Petroleum Corp. it is the 3rd Circuit.
The Rule:
An owner of property had no right or actual interest in recovering from a third party for damage which was
The owner of 33 BCF of gas cant’ just stuff it in his pocket and move it county-to-county to avoid taxes. So, the question: Is gas in storage subject to ad valorem tax on personal property? 
The Harris County Appraisal District thought so. The taxman prevailed in ETC Marketing v. Harris County
Co-authors Preston Kamin and Joe VireneEverybody from the well site to the board room has an opinion about when oil prices will “rebound”. Rather than an opinion, we have a question: How do I collect my money while we’re waiting?
This post is a refresher for service companies and suppliers looking for money from